Fifty per cent of the smaller firms are not paying taxes and the government is keeping a tab on such entities to ensure there is no tax evasion,” the Lok Sabha was informed today.

Minister of State for Finance Jayant Sinha said the government has taken “revolutionary steps” to ensure there is no tax evasion and steps have been taken to increase tax collection.

Things have improved as far as prevention of tax evasion is concerned, he said while replying to questions.

Referring to smaller firms, Sinha said 50 per cent of them do not pay taxes and the government is keeping a watch to ensure there is no evasion.

To ensure compliance, stringent action is being taken, he said.

The minister said there are 25 crore households in the country, out of which 18 crore are in the rural areas.

Out of the seven crore households in the urban areas, nearly half cannot pay tax and the total eligible households who come under the tax net are between four to six crore.

To a query on people trying to evade taxes by showing their income as ‘agriculture income’, Sinha said the scope of such evasion is less.

Responding to a supplementary on recommendations made by the Special Investigation Team (SIT) on black money, the minister said a series of recommendations have been received and the government has benefitted greatly by the suggestions of the SIT.